Commentary: Firms Should Focus on Old-Fashioned Client Retention
With a self-reported A/E/C industry repeat-work average of 80-85%, it’s tempting to assume that most firms understand client retention. However, if these past few years have taught us anything, it’s that doing good work is necessary but not sufficient for holding onto clients.
The time, energy and focus required to keep a desirable client coming back can be overwhelming. Yet the economics are indisputable. Consider the wasted pursuit costs of landing a new client when that client becomes dissatisfied and goes elsewhere. Depending on the client, your opportunity, travel, proposal and labor costs, the hours you’ve lost can easily run into thousands of dollars. And that’s not factoring in the difficult-to-measure intangibles such as the impact that a dissatisfied client may have on your firm’s reputation.
One invaluable way to track what clients truly value and what their hot-button issues really are is client research, both client/prospect perception studies and ongoing client monitoring upon project completion. Here’s some of what I’ve learned over the years from interviewing many of your clients across a variety of market sectors, organization sizes and geographies.
• When it comes to client satisfaction, rose-colored glasses are a fashion faux pas. Never take a client’s satisfaction for granted. The A/E/C industry has not cornered the market on conflict-aversion. Some clients will not provide unsolicited feedback. You must develop the skill of asking probing, open-ended questions. Yet even when given the opportunity, some clients feel more comfortable sharing their experiences and concerns with an independent third party. No matter how you check in with them, be sure that you do.
• If you know (or sense) that a client is unhappy, handle it before making requests. Nothing upsets a client more than receiving an invoice for services they don’t believe were adequately delivered. You should also avoid asking a client to serve as a reference when they’re dissatisfied with any aspect of your firm, whether it’s the end product or your approach to business development, relationship management or project delivery.
Have that difficult conversation before sending the invoice or asking for a reference. The choice is yours: you can make the necessary adjustments in the short term to retain the client or take the path of least resistance and almost certainly lose the client in the long term.
• Clients don’t like being “turfed.” In this age of doing more with less, beware of overloading project managers to the point where critical functions like project communications are delegated to folks that the client perceives as underlings. Of course, there are instances when this has to be done for logistical reasons (e.g., the PM will be away/unavailable). But the PMs who rank highest in client satisfaction proactively explain these instances to their clients and make sure their “lieutenant” is prepared to handle any questions or concerns.
• Skillful project planning and budgeting are essential. Clients expect and appreciate accurate project plans and budgets. It’s now more than the proverbial “staying on time and within budget.” It’s about anticipating the bumps in the road and factoring those into the project schedule, and especially, the budget. As we know and sometimes forget, clients don’t like to be “change-ordered” to death.
• Appreciate the complexity of project communications. This vital function encompasses many elements, from communication style, frequency and mode to responsiveness. Most clients want to be kept informed throughout the entire project, especially regarding unexpected bumps and change orders. But rather than adopting a one-size-fits-all approach, we must understand the frequency and level of detail that individual clients want.
As one interviewee told me, “I want ‘just the facts ma’am.’ What’s the situation, and how much is it going to cost me? I don’t want to know all of the ‘what happened’ and ‘whys.’” Such clients may be the exception rather than the rule, but it’s our job to understand our clients, how they want to be contacted (office/cell phone, e-mail, texting, in-person meetings) and how often.